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Commodity price hikes due to climate events
will hit the neediest countries

With global wheat prices expected to
spike following an export ban in Russia due to fires destroying millions
of hectares of crops, a new study measuring global food security has identified
the food supplies of Afghanistan and nine Africa states as the countries
which are most at risk and vulnerable to rising costs.

The Food Security Risk Index 2010, released
by risk analysis and rating firm Maplecroft, evaluates the risks to the
supply of basic food staples for 163 countries. It uses 12 criteria developed
in collaboration with the World Food Programme, to calculate the ranking
including: the nutritional and health status of populations, cereal production
and imports, GDP per capita, natural disasters, conflict, and the effectiveness
of government.

Afghanistan (1) is rated as least secure
in food supplies, whilst the African nations of the Democratic Republic
of Congo (2), Burundi (3), Eritrea (4), Sudan (5), Ethiopia (6), Angola
(7), Liberia (8), Chad (9) and Zimbabwe (10) are also considered "extreme
risk." In all, African nations make up 36 of the 50 nations most at
risk in the index.

Sub-Saharan Africa is particularly vulnerable
to food insecurity because of the frequency of extreme weather events,
high rates of poverty and failing infrastructures, including road and telecommunications
networks, which decrease both production and distribution capacity. Conflict
is also a major driver of food insecurity and the ongoing violence in Afghanistan
and DR Congo is largely responsible for the precarious food security situation
in both countries.

"Russian brakes on exports, plus
a reduction in Canada's harvest by almost a quarter due to flooding in
June, are provoking fluctuations in the commodity markets. This will further
affect the food security of the most vulnerable countries" said Fiona
Place, Environmental Analyst at Maplecroft.

Professor Alyson Warhurst, CEO of Maplecroft
adds "Food security is a critical geopolitical issue and an important
factor for investors concerned with sovereign risk, food and agricultural
business with respect to supply chain integrity and foreign direct investments.
The world will now look to China (96) as one of the biggest storage countries;
however, food consumption there is on the increase and surpluses are not
quantified. Traders report 200m tones are held in reserve globally - an
improvement on 2008; but, this is no comfort for countries such as Haiti
and Pakistan, which are heavily dependent on food aid."

Climate change is having a profound effect
on global food security. The heat wave in Russia (115 and medium risk)
has come at the same time as devastating floods in Pakistan, which will
have long term effects on the country's food security situation. Pakistan
is currently ranked 30th and "high risk" in the index, with security,
double digit inflation, high food prices and poverty playing a large part
in the country's ranking. However, overall country risk can mask the very
acute risks in regions such as Punjab and Sindh province. The recent extreme
weather events in Pakistan and Russia are expected to result in a further
increase in risk to their own food security next year.

The Food Security Risk Index is one component
of Maplecroft's Resource Security Series of indices, which also encompass,
water security, energy security and a combined index for overall resource
security. These are developed by Maplecroft to enable businesses and investors
to identify risks in supply chains, operations and investments, including
sovereign bonds.